BTC falls below $59K as 10,000 coins move to Coinbase Prime amid positive CPI data.

The cryptocurrency market experienced a notable downturn on Wednesday as Bitcoin briefly dipped below $59,000 following news of a significant transfer by the US government. The Department of Justice moved 10,000 BTC, worth approximately $591 million, from a wallet associated with seized Silk Road assets to Coinbase Prime. This transfer, likely for custody or potential liquidation, sparked a 3% decline in Bitcoin’s value.

Interestingly, this market reaction occurred despite positive US Consumer Price Index (CPI) data, which came in at 2.9% year-over-year, the lowest rate since 2021. The lower-than-expected inflation figure has increased speculation about potential Federal Reserve interest rate cuts, typically a bullish signal for risk assets like cryptocurrencies.

Meanwhile, on-chain analysis has revealed a shifting correlation between Bitcoin’s price movements and the reserves of Germany’s ETC Group Physical Bitcoin (BTCE) fund. Historically, Bitcoin’s price often rallied with increases in BTCE reserves and fell with declines. However, this pattern appears to have changed since the launch of US spot Bitcoin ETFs in January, suggesting evolving market dynamics that warrant further investigation.